New India Assurance Co. Ltd. vs Sher Singh and Others

Surjit Singh, J.—The only question raised in these three appeals filed by New India Assurance Co. Ltd. is whether the mere proof of the fact that person driving the motor vehicle at the time of occurrence of the accident resulting in death or injury to third party, would amount to breach of condition of the policy that the vehicle will not be driven by a person not holding a valid and effective driving licence and consequently the insurer will be absolved of the liability to pay any compensation to the third party.

Tractor No. HP 33-348 was owned by Narain Singh, respondent No. 2. He had insured himself with the appellant against his liability for payment of compensation in the event of the death of or injury to third party, on account of the use of the said tractor. On 21.11.1993 around 8 p.m. when the said tractor was being driven at a place called Naitla on Diargi-Rajwari Road in Balh area of Mandi District, by Dhaneshwar, respondent No. 1, who is the son of Narain Singh, the respondent No. 2, the owner of the tractor, an accident took place. One person who was on board the tractor as an employee died as a result of the accident. Two more persons, namely, Shiv Shankar, a son of the owner of the tractor, namely, Narain Singh, respondent No. 2 and one Bahadur Singh, who happened to be at the site of the accident also died, as the tractor while rolling down the road fell on them.

Three separate petitions were filed, one by the parents of Kashmir Singh, the employee, another by Tula Devi, wife of Narain Singh, respondent No. 2 and the third by the wife and children of Bahadur Singh, seeking the award of compensation. Respondent Nos. 1 and 2 did not deny the occurrence of the accident, though they did deny that the cause of the accident was rash or negligent driving of the tractor. The appellant, impleaded as respondent No. 3 in all the three petitions, raised a number of preliminary objections. One of them, which alone is relevant in these appeals, was that the driver of the tractor, namely, Dhaneshwar, respondent No. 1, did not possess a valid and effective driving licence. The other objections raised by the insurance company need not be noticed, because findings qua them have not been challenged in these appeals.

The learned Tribunal, while dealing with the aforesaid plea of the appellant observed that the licence, copy Exh. RW 1A, produced by respondent Nos. 1 and 2 was fake, as testified by an employee of the Licensing Authority, R.T.A., Hyderabad, examined on commission. However, the learned Tribunal further held that the licence having been renewed subsequently by Sundernagar Licensing Authority and the renewal being genuine, the fake licence stood validated. In holding this view, the learned Tribunal placed reliance upon a judgment of Punjab and Haryana High Court in National Insurance Co. Ltd. Vs. Sucha Singh and Others,

Tribunal allowed all the three claim petitions and awarded different amounts of money to the claimants.

The appeals have been filed by the insurance company. Its grievance is against the finding that the licence possessed by the respondent No. 2 was genuine and so it (the appellant) was liable to pay the compensation to the claimants.

I have heard the learned Counsel for the appellant, as also the learned Counsel representing the respondents.

The precedent upon which the learned Tribunal has placed reliance to hold that the licence is genuine (though initially fake) on account of its having been renewed, has been overruled by the Hon''ble Supreme Court in New India Assurance Co., Shimla Vs. Kamla and Others etc. etc., with the observation that if such a proposition is allowed to stand as a legal principle, it may thrill counterfeiters the world over as they would be encouraged to manufacture fake documents in a legion. It has further been held that what was originally a forgery would remain null and void forever and it would not acquire legal validity, at any time by whatever process of sanctification subsequently done on it. In view of the aforesaid judgment of the Hon''ble Apex Court, the finding of the learned Tribunal that the licence is genuine is set aside.

While addressing arguments, learned Counsel for the appellant urged that though in view of the law laid down by the Apex Court in National Insurance Co. Ltd. Vs. Swaran Singh and Others, , the mere proof of the fact that the licence is fake would not absolve the insurer of its liability to pay the compensation as it is further required to be proved that the insurer was guilty of negligence and failed to exercise reasonable care in the matter of use of vehicle by duly licensed driver. In the present case, the very fact that the driver was the son of the insured was enough to jump to the conclusion that the insured knew that the licence was fake. The argument has been stated only to be rejected. The reason is that there is absolutely no evidence on record indicating that the insured knew or had even an occasion to know that the licence was fake. From the mere relationship of father and son, between the insured and the driver, respectively, it cannot be assumed that the insured knew that the licence was fake. As a matter of fact, the assumption should be otherwise. Father would never suspect the genuineness of the documents of his son, unless of course the son has committed some serious illegality or indulges in illegal activity to the knowledge of the father. It is also a matter of common knowledge that it is quite easy for a son to dupe and deceive his father because of the closeness of the relationship and the natural confidence which a son enjoys of his father.

The Apex Court in National Insurance Co. Ltd. Vs. Swaran Singh and Others, has, inter alia, held as follows:

102 (iii) The breach of policy conditions, e.g., disqualification of driver or invalid driving licence of the driver, as contained in Sub-section (2)(a)(ii) of Section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time.

In the present case there being no evidence that the insured knew or had any occasion to know or even suspect that the licence held by the driver of the tractor was fake, as discussed in detail herein-above, it cannot be said that the insured is guilty of breach of the condition contained in the policy that the vehicle will not be driven by a person not possessing a valid driving licence.

As a sequel to the above discussion, the appeals are dismissed.